AFD successfully issued a new 1 billion dollars sustainable bond maturing on january 16th, 2030

This new transaction marks AFD’s first syndicated benchmark transaction of the year, but also the reopening of the dollar French SSA market. This was indeed the first dollar primary bond issuance coming from a French public agency since September 2024, and its success confirms the strength of AFD’s signature across a broad geography of investors.

It is also the AFD’s first sustainable bond issuance under its new SDG Bond Issuance Framework, published in November 2024.

Samia Ben Mebarek, Deputy Head of Financing and Market Operations at AFD: “That 5-year USD deal reopens the market for French agencies. The 5-year is not our easiest option, but as the market was very strong it felt like a good opportunity to take. Thanks to high quality investors we were able to issue $1bn which is a good way for us to start our 9bn funding programme.”

Transaction highlights:

The USD 1 billion transaction offers a final spread of 79 bps over the SOFR Mid-Swap curve, equating to a semi-annual re-offer yield of 4.917% and a re-offer price of 99.816%, with a coupon of 4.875%.

Execution and allocations:

Following a constructive reopening of the broader dollar SSA primary market early in the week, the transaction was announced at 13:35 CET on Wednesday 8th January 2025. IPTs were released concurrently to the mandate and were set at SOFR MS+80 bps area. The transaction garnered solid demand from the outset, with IOIs reaching over $1.6bn (incl. 350m JLM interest), allowing AFD to open the following morning at 9:14 CET, with guidance set 1bp tighter at SOFR MS +79 bps.

Books continued to grow steadily throughout the morning. At 10:45 CET they were in excess of $2bn (incl. 450m JLM interest) when AFD decided to set the final spread to SOFR MS +79 bps, giving investors clarity. Final terms were subsequently launched at 13:45 CET, setting final size to 1 billion dollars. The transaction priced at 16:23 CET, with a semi-annual coupon of 4.875% and a semi-annual re-offer yield of 4.917%.

The orderbook’s strong quality and granularity highlights AFD wide support within Europe (56%), but also its broader footprint in Americas (25%), Asia (14%) and Middle-East (4%). This high quality is also reflected in the allocations’ distribution by investor type, which was driven by central banks & official institutions (61%), asset managers (19%), banks (12%), insurance & pension funds (4%), and finally 4% allocated to others.

Transaction details:

⦁    Issuer: Agence française de développement

⦁    Ratings: AA- (S&P, stable) / AA- (Fitch, negative)

⦁    Transaction Size: US$ 1 billion

⦁    Issuing Date: January 9th, 2025

⦁    Settlement Date: January 16th, 2025s

⦁    Maturity Date: January 16th, 2030  

⦁    Re-offer Price: 99.816%

⦁    Coupon: 4.875%, semi-annual, 30/360 

⦁    Semi-Annual re-offer Yield: 4.917%

⦁    Final Spread: 79 basis points

⦁    Listing: Euronext Paris

⦁    Joint Lead Managers: BNP Paribas, BofA, Deutsche Bank, Goldman Sachs, Morgan Stanley

Being a Sustainable issuance, the proceeds of the bond will be used to finance/refinance a portfolio of loans that meet the criteria defined in the group’s SDG bond issuance framework.